All vehicles driven on highways degrade them to some degree, necessitating maintenance and new construction to meet growing demand. State fuel taxes are tied to meeting this need, but electric vehicles don’t use fuel and therefore don’t pay gas taxes or contribute to highway upkeep. As electric vehicles gradually proliferate and vehicle fuel efficiency also improves, states receive less gas tax revenue. Facing this looming fiscal challenge of maintaining, modernizing and expanding roads, highways and bridges, several states, including Oregon, have taken early steps to establish per-mile vehicle fees rather than per-gallon gas taxes to ensure that all drivers pay for their road use. 

Oregon House Bill (HB) 4009 would reform the state’s per-mile charging program, OReGO, in a few key ways. OReGO would become mandatory for electric vehicles (EVs) and hybrids. It would also commission biennial highway cost-allocation studies to recommend rates for OReGO charges, following the same cost allocation discipline that governs fuel taxes. Finally, it would change eligibility for one existing EV rebate and pause another.

Oregon has long been a trailblazer in highway funding. The state was the first to levy a fuel tax in 1919. The state commissioned its first highway cost-allocation studies in 1937 to assign highway system costs to vehicle types based on their road use. This idea matured, and a biennial highway cost-allocation study (HCAS) and tax rate adjustments were enshrined in the Oregon Constitution in 1999. The 24th HCAS was published in 2025.

Beyond its policy of regularly conducting highway cost-allocation studies, Oregon was also forward-thinking in implementing a per-mile charging program. In response to the growing popularity of hybrids and EVs, the state conducted two pilot programs in 2006 and 2012 to assess the feasibility of mileage-based user fees.

In the 2013 legislative session, Senate Bill 810 built on the pilot program’s momentum and authorized OReGO, which established the country’s first road usage charge program. OReGO has been in operation since 2015. But the program remains voluntary, and fewer than 800 drivers are participating. An optional program has not generated enough interest to solve the transportation funding problem. 

HB 4009, introduced at the request of the House Interim Committee on Transportation, would require owners and lessees of electric or hybrid vehicles to enroll in the OReGO program. Other elements of the bill include: 

• Retaining options for reporting mileage, including odometer readings, in-vehicle telematics, or plug-in devices;
• Retaining the option for a flat-fee payment in lieu of reporting mileage;
• Changing Oregon’s existing EV rebates, suspending the standard rebate under the Oregon Clean Vehicle Rebate Program, and limiting eligibility for Oregon’s Charge Ahead rebate to one per household; and
• Commissioning the first OReGO HCAS to set initial rates and require the same report biennially. 

This approach preserves user choice on how drivers want to report their mileage, ensuring users can pick an option that best suits their preferences. It also takes the necessary step of making the program mandatory for electric vehicles and hybrids, so vehicles, regardless of their powertrains, pay their fair share to maintain the state’s highways. 

Most importantly, HB 4009 would require that rates be grounded in Oregon’s cost allocation framework. Many states that would benefit from per-mile charging programs are defaulting to flawed approaches such as indexing rates to inflation (California or North Carolina) or adjusting rates to hit a specific revenue target (New Jersey’s Petroleum Gross Receipts Tax). These approaches detach fuel tax rates from what it actually costs to maintain the highway network. In contrast, the HCAS framework directly links these rates to system maintenance costs.

This distinction will matter more every year as fuel economy improves and a growing number of EVs and hybrids join the fleet. The amount a vehicle owner pays should be based on the vehicle’s weight, the miles it travels, and the wear it causes to roads, not based on some measure of inflation or an arbitrary revenue target. 

Oregon has demonstrated fiscal discipline in highway funding for more than a century. House Bill 4009 would continue that tradition.